The Treasurer’s Role: Evolving, Revolving, Dissolving?

By Ted Howard

What will the corporate treasurer’s role be in a few years? 

For most treasurers, being in the role means being in it 100%. But in the future, will serving as treasurer be just 60%, 70% or 80% of some other, broader role—controller, risk officer, accounting, chief cook and bottle washer? With only small percentage dedicated to treasury? Will it be casual side job? “Whose turn is it to be treasurer this week?”

Perhaps that last scenario is a bit drastic, but the idea of a role that only a finance generalist rotating through takes on hasn’t been far from the thoughts of many members of NeuGroup peer groups. Recently, company founder Joseph Neu said in a note to clients that when he asked members at several meetings, either new to the treasury role or seasoned vets, what they thought of their predecessors and successors, both groups suggested that the day of the long-standing, tenured treasurer could be coming to a close. Those new to the position felt their predecessors were unique, with experiences “not likely to be repeated,” while the seasoned vets felt treasury was more likely to become “a rotating assignment.”

What’s going on? Coming automation and robots, and farther out, really smart robots, i.e., AI, are likely the main driver behind these assumptions. And other recent observations at NeuGroup meetings back up this sentiment.

Generalists should also be smart enough to surround themselves and maintain people in key treasury roles with good general treasury judgment honed by experience in a variety of treasury and finance disciplines. 

At the Assistant Treasurers’ Group of Thirty (AT30), one member discussed how structural logic can be a challenge in organizing treasury optimally but also how bots—via robotic process automation—will reduce the time sucks from mundane tasks. Most treasury departments handle very low-complexity processes that require manual input of high-volume data such as payments, reconciliation, supply chain finance and trade finance processes. RPA will take on these tasks and alleviate the treasury department’s workload.

The risk is that there may be some other disruptive technologies that sneak in unnoticed at the higher-value end. This means that machines that are fed data will learn to analyze and suggest or perform actions with increasing intelligence, for example, and could start to outperform treasury specialists. The question is whether they will really be able to take over what a human treasurer probably does best: corporate planning, supporting deal structuring, and working capital management. But you never know.

Thus, the consensus shared by the AT30 is that becoming more of a high-performing generalist sounds smart. And those generalists should also be smart enough to surround themselves and maintain people in key treasury roles with good general treasury judgment honed by experience in a variety of treasury and finance disciplines, to provide environmental, social and governance checks on the machines while also ensuring they understand how to support all stakeholders.

The good news in all this, as Mr. Neu points out, is that treasury is being led by executives identified as showing high leadership potential who are on a strategic finance track. However, this also means their depth of treasury knowledge is not as great as that of a tenured treasurer.

So the challenge for finance organizations increasingly becomes how to support rotational treasurer roles. The strategic finance rotations bringing in treasurers without deep treasury experience could be supported by machines with “artificial” treasury intelligence. This is where machine learning will kick in; it will be able to augment the skills and capabilities of these less experienced treasurers when it comes to applications like cash forecasting and risk management.

Arguably, the role of treasurer might diminish eventually but until then there is a lot of transitional work to be done as digitization becomes more embedded and the structure of rotating finance professionals becomes more mature. As it stands, current treasuries, in order to maintain effectiveness with high standards and best practices, need to create the right blend of treasury specialists and generalists.

This means that a good risk mitigation strategy would be to embed more specialist treasury knowledge into processes and systems, and to set up effective ways to transfer that knowledge. This would empower the smart generalists who will be leading the future treasury, while maintaining financial health, business support and risk management to keep firms viable in risk scenarios that generalists might not be as well-equipped to manage.